Institutional Arrangements and Public Policies: What Types of Interaction to Enchance the Contributions of Agriculture to Local development?/Formes De Coordination et Politiques Publiques: Quelles Articulations Dans Une Perspective D'ancrage Territorial De L'agriculture En France?

Abstract In French rural areas, many collective actions associating farmers have emerged in the last rive decades more or less through the impetus given by public policies. The aim of the new Common Agricultural Policy (CAP) is to promote multifunctional agriculture, not only by changing the relationship between the State and farmers, individually or collectively, but also by trying to give a new content to collective actions at the local level. This change in the CAP can be justified by the fact that the many of the resources used and produced by multifunctional agriculture present the characteristics of public goods. First, they concern different groups of actors on a given territory and these are not only farmers; they are part of the production process as well as the consumption process. Second, it is well known that their use generates conflicts and that their production at a satisfactory level requires institutional arrangements. The main objective of our study is to analyze the role of public policies in the emergence and articulation of different institutional arrangements developed by farmers and known for their joint production of standard marketed agricultural goods and of public goods, in particular environmental goods: In general, how can collective action produce public goods? How is collective action mobilized by agricultural policies to achieve objectives linked to multifunctionality? How does this affect the efficiency of the policies implicated? To answer these questions, we have developed a theoretical framework using concepts from institutional economics. We start by discussing the concept of externalities in the light of work by Commons and Callon. In a given rural territory, a farm tan produce, along with standard goods and services, flows of physical and non-physical products with either positive or negative effects on the production and consumption activities of other economic agents. These phenomena result from the interaction of agents and are commonly called externalities. Some of these flows come from the phenomenon of joint production, which are associated with the use of particular assets and with the production technology. It is important to distinguish joint production from the phenomenon of jointness, which involves the more or less intentional coordination of multiple agents. The example can be given of farmer organizations which promote quality labeled products. To what extent can such an organization also contribute to multifunctionality by producing environmental and social goods, along with marketed quality labeled goods? Commons and Callon's work indeed go further and suggested that externalities could be analyzed as a result of an incomplete negotiation process among actors who are trying to achieve a consensus with limited rationality about what one can do and not do. The coordination of economic agents is, therefore, not a matter of exchanging goods but rather a negotiation on the definition of individual rights and duties regarding the other, in order words, what Commons called the 'working rules'. At a given time, in a given society, one can associate a set of 'working rules' with a particular institutional arrangement. Institutions comprise unorganized forms of customs as well as organized forms of collective actions, including the market and the State. They are being set to ensure the provision of diverse resources, and in particular of public goods. Under this framework, externalities in agriculture can be redefined as the result of institutions failing to achieve a consensus on a set of property rights and satisfactory 'working rules' necessary to solve conflicts over the use and the production of public goods associated with multi-functional agriculture. This means that the promotion of multifunctionality should involve a process of institutional change in which the State, as one of the highest governance levels, can play an important role. According to Commons, every institutional change relies on three types of 'trans-action': the 'bargaining transaction', the 'managerial transaction' or organizational transaction, and the 'rationing transaction' or distributive transaction. …

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